Increase in the number of foreign investment applications in Andorra in the first half of 2021


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After an atypical year 2020, in which economic activity was also strongly disrupted by the coronavirus pandemic, the number of foreign investment applications in Andorra increased strongly during the first half of 2021.

Data presented by the Minister of Economy a few days ago reveal an increase in direct investment authorisations: 535 authorisations have been granted, 93% more than the same period in 2019 and 254% more than in 2020.

These figures show that the 2020 slowdown does not represent lost requests but that they were delayed because of the pandemic.

Since 2012, Andorra has had Law 10/2012, of 21 June, on foreign investment in the Principality of Andorra, created with the aim of boosting and diversifying the country’s economy.


    1. Foreign investment demand increased in Andorra in 2020

      Investment volume grows in the first half of 2021

      Spain and France are the countries that most want to invest in Andorra

      Types of decisions on foreign investment applications

      A transparent and comparable regulatory framework

Foreign investment demand increased in Andorra in 2020• Foreign investment demand increased in Andorra in 2020

A total of 671 applications were submitted, which was almost 15% more than in 2019. Of these, 637 were successful, 2 were ongoing at the end of the year, 7 were rejected and 25 lapsed.

In 2019, a total of 584 applications were counted, which was the lowest number of applications received since 2014. The years with the highest number of applications were 2015, 2016 and 2017 (years with more than 700 applications).

In 2020, despite the increase in the number of applications, the declared start-up capital (i.e. the amount that the foreign investor’s business plan shows as being necessary to start their activity and establish themselves) was 36% less than in 2019. Last year the total from all the applications submitted was €215,548,228 while in 2019 it was €336,917,845. The pandemic and the economic slowdown led to the containment of investment, which, as we have seen, recovered during the first half of this year.

Both in 2020 and in the first half of 2021, the economic sectors with the highest number of applications were service provision, property and product marketing.

Investment volume grows in the first half of 2021

The processing of foreign investment requests is necessary for corporate operations such as the creation of a new company in Andorra, the acquisition of more than 10% of shares or holdings in an Andorran company, the substantial modification of the corporate purpose of a company or the injection of capital.

During the first half of 2021, the volume of investment reached 444 million euros, which represents an average of 830,000 euros of investment per business. To these figures must be added the €80 million of foreign investment in property.

These figures are very positive after the end of a year 2020 in which the volume of investment was severely curbed by the economic situation due to the pandemic.

  • Of the 637 favourable applications in 2020, 417 were formalised. So although fewer applications were submitted in 2019, more were formalised (a total of 458), a fall of 9% in 2020.
  • The volume of initial investment declared in the applications formalised in 2020 was €133,831,574, which represents 51.61% less than in the previous year, when it reached €276,796,872.
  • By business area, 276 applications were formalised for the provision of services, 73 in the property sector, 42 in the marketing sector (retail and wholesale), and 26 from other sectors.
  • There were no formalised applications for portfolio investments (in 2019 there were two formalised applications, which accounted for 25.3% of the total initial investment declared).
  • In terms of the volume of formalised applications for initial investment, the sector with the greatest weight in 2020 was that of property companies (53.5% of the total), followed by that of property development and construction (22.6%) and, in third place, the provision of services (17.4%).

If you want to know the details of previous years, please consult the article: Foreign investment in Andorraincreasesin 2019].

Spain and France are the countries that most want to invest in Andorra

Neighbouring countries are the ones that have submitted the largest numbers of applications since the foreign investment law was passed. Of the requests formalised in 2020, 225 came from Spain (+7) and 86 from France (-18). Notably, Great Britain increased to 16, reversing the trend of the previous year, when there were only 5. Total applications from Russia fell progressively, from 26 in 2014 to only 2 in 2020.

Types of decisions on foreign investment applications

Once the applications have been processed by the Andorran government, they will end up in one of four situations: favourable, denied, in progress or expired. Once the application has been submitted, the administration has one month to rule on the file, and administrative silence is considered a decision in favour.

  • Favourable or authorised applications: these are the ones that can proceed. From the date of the decision, the investor has 6 months in which to formalise the investment in front of an Andorran notary (with the option of a 3-month extension).
  • Rejected applications: are those that have received a negative report from the body responsible for of assessing the application. The most frequent reasons for refusal are a negative report on the prevention of money laundering or that they are considered to be detrimental to public and economic order.
  • Expired applications: are those which, after two months in suspension pending the completion of necessary or complementary information required by the administration, do not complete the file.
  • Applications in progress: are those that have been submitted to the administration and are currently being reviewed by it.

A transparent and comparable regulatory framework

Since 2012, the entry into force of the foreign investment law has allowed the incorporation of companies or participation in existing companies with 100% foreign capital. This law was created with the aim of boosting economic growth by attracting new companies and talent to the country. At the same time, it made it possible to diversify the economy by attracting new economic sectors and expanding existing ones with new companies coming to set up in Andorra. A clear example of this is the recent announcement by the multinational pharmaceutical company Grifols of its intention to set up a pioneering research centre in the Principality.

At the same time, the foreign investment law allowed Andorra to open up to new markets. The signing of double taxation agreements with European Union countries (a list of countries that is gradually being extended) has also played a key role in this. Thus, foreign companies that establish themselves in the country pay taxes only in the country where the company is based (with the added advantage that taxes are lower in Andorra).

You may be interested in our article on the subject: Andorra to extend the list of countries with which it has a double taxation agreement

2020 was an atypical year in all senses of the word. However, this context did not dampen the interest of foreign companies in establishing themselves in Andorra, seeking a lower tax burden for their businesses and companies.

The first half of 2021 shows very positive figures that demonstrate that 2020 was only a small break in the increasing growth of foreign investment in Andorra.